Macro and Government Bond Commentary: Yields fall after RBI revises OMO auction size, liquidity deficit widens • The 10Y benchmark (6.79 GS 2034) opened lower at 6.69% after the RBI increased the OMO purchase auction amount to INR 400bn from INR 200bn notified. Further moves lower in yields were limited on account of profit booking, with markets closely awaiting India CPI inflation scheduled tomorrow. Jan CPI inflation is expected to print softer ~4.55-4.60% with correction in vegetable prices, though core inflation might inch higher with precious metals. The 10Y bond closed trade at 6.70% vs 6.71% prev. The INR strengthened further today on chatter of RBI intervention in FX markets continuing
